Saudi fields

From: Glenn Morton <>
Date: Mon Apr 12 2004 - 22:56:08 EDT

An analysis in this week's Oil and Gas Journal of te Saudi fields, has
some interesting things to say about the claims of the Saudi oil
minister. He said that they could raise their production by 50% and keep
it there for 50 years. The article I just read is Manouchehr Takin,
"Sustainable Supply from saudi Arabia, Iraq: Oil Reserves or Politics?"
Oil and Gas Journal, April 12, 2004, p. 20-22

Takin believes that the Saudi's do have 261 billion barrels of reserves,
which by my calculations would mean they should peak around 2010 or so.
He outlined planned development projects of 1.75 million barrels per
day. These projects are going on now. Will they add to Saudi production
capacity (believed to be 10 million bbl/d now)? Takin says it is
unlikely. He says that the 1.75 million new barrels per day of
production which will be put online over the next 3 years will merely
counteract the decline the Saudi's are seeing in their fields. That
means that they would stand still in their production ability. Takin
believes that at most 1-1.5 million barrels of higher production is all
they could do. It gives one pause to think that demand for oil will be
50% higher in 16 years.

One quote

"Will Saudi Arabia choose to undertake the ...costly megascale
development projects of its oil fields in anticipation of another
opportunity (as in 1990-1991) to increase its market share, or will the
kingdom tread a more cautious path? Let us remember that Saudi Aramco
has borrowed in the international capital market, the Saudi government
has a domestic debt comparable to the size of the country's GDP, and the
kingdom has decided not to open the oil sector to outside investment.
These trends suggest that the cautious approach is more probable.
Manouchehr Takin, "Sustainable Supply from saudi Arabia, Iraq: Oil
Reserves or Politics?" Oil and Gas Journal, April 12, 2004, p. 22

If the Saudi's don't increase their capacity, we can't likely meet the

"The rate of discovery of worldwide oil reserves, after declining for 40
years, has slowed to a trickle. In 2000, there were 16 large discoveries
of oil, eight in 2001, three in 2002, and none last year, notes James
Meyer, director of the Oil Depletion Analysis Centre in London."

And that is our problem. Here are some stats from the Wall Street

Oil found by exploration drill bit
1997 4.5 billion
1998 5.8 billion
1999 9.5 billion
2000 13.05 billion bbl
2001 4.02 billion bbl
2002 3.34
Chip Cummins, "Data Cast Doubt on Oil Discoveries," Wall Street Journal,
January 23, 2004, p. A2

In each of the above years, we pumped more than 26 billion barrels out
of the ground. The math of a balance sheet doesn't look good.
Received on Mon Apr 12 23:09:00 2004

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